Subsidies lost, urgency gained

As public broadcasting braces for expected cuts from its most predictable revenue source — the annual CPB appropriation — system leaders are talking as much about saving money as raising more of it.

Collaboration and consolidation — ideals that pubcasters have long espoused but rarely implemented — were buzzwords at this month’s Public Media Marketing and Development Conference in Pittsburgh. Top fundraisers, station execs and analysts urged their peers to tear down walls that separate local stations and cooperate to preserve and strengthen audience service.

“Audiences don’t give money to things they like,” McTaggart said at the fundraisers’ conference. “They give money to things they love.” (Photo: MarkVogelzang.)

Keynoters Fred and Paul Jacobs, sibling radio consultants from Detroit, delivered the starkest diagnosis and most urgent prescription — formation of a commission to analyze station finances and design a restructured, pared-down system of stations. Pubradio leaders already working in these trenches described a new strategy for preserving service as more universities spin off their stations.

In his first major speech since promotion to chief exec of American Public Media/Minnesota Public Radio, Jon McTaggart said pubradio can tackle its funding challenges and competitive threats by relentlessly focusing on audience service.

Pubcasters are working hard to fulfill missions to be relevant to their audiences, McTaggart said, “but lately I’ve been thinking that relevance is no longer enough. . . . We need to be essential. We must become so important to our audience, so important to our community, that they can’t imagine life without us.”

If public radio stations can make this shift — becoming essential to their listeners and engaging them on a much deeper level — resources will follow, McTaggart said. “Audiences don’t give money to things they like. They give money to things they love.”

Strap in for a wild ride

In a PMDMC session on strategies for dealing with continuing subsidy losses, panelists forecast accelerating cuts in the field’s federal and state funding, coupled with contraction among university-owned stations — either through outright station sales or cuts in annual subsidies and in-kind support from higher-ed licensees.

Roger LaMay, g.m. of Philadelphia’s WXPN, urged station leaders to prepare for the worst. “I think we’re faced with a very urgent situation,” LaMay said during the breakout session July 15. “The fact that we have prevailed in the first round of the federal funding battle may have given some of us a [false] sense of security.”

“We’re going to have to take some kind of cut, and we’re one election away from losing the whole thing,” LaMay warned, referring to the federal appropriation.

No one knows how pubcasting will fare in continued budget negotiations in Washington, but the effects of cuts to pubcasting’s state aid ricocheted across the system this summer, hitting public TV and radio outlets in at least a dozen states.

Public Radio Capital financing specialist Erik Langner predicted that these losses will deepen as federal stimulus grants run out, further tightening state spending and prompting more universities to re-evaluate financial commitments to their pubradio stations.

“When stations are being sold, it’s almost always universities that are selling,” said Langner, PRC’s director of acquisitions and legal affairs. Their reasons for doing so are almost always economic.

Loss of pubradio signals is “a fundamental risk facing the system,” Langner said. As the most heavily subsidized licensee type in public radio, university-owned stations are the most vulnerable to funding cuts, and when cutting spending or changing owners, they typically cut local programming, the content that distinguishes them as public-service broadcasters.

These stations comprise two-thirds of public radio licensees, Langner said.

Langner also presented a chart spelling out the extent to which all CPB grantees — including both public radio and TV stations — rely on subsidies. For 40 percent of the public media companies that receive CPB aid, subsidies provide more than 50 percent of their revenues. Thirty-four percent of these grantees are radio outlets; 53 percent are TV stations. The subsidy losses could be big ones: More than one-third of CPB grantees — 35 percent — receive grants or government funding of at least $1 million.

Langner urged station managers to explore collaborations with other outlets in their regions.

Some stations may be able to boost revenues by adopting best practices in their fundraising, but for many the funding gap and competitive pressures will demand much more, Langner said. “Operating efficiencies are going to have to become more common through the industry.”

One promising approach to this is collaborations between large and small stations, even those in different cities. WBEZ President Torey Malatia described how a team drawn from his staff advised Essential Public Media, the new Pittsburgh nonprofit that’s buying WDUQ from Duquesne University. Essential had set the goal of converting from a mixed news/jazz format to full-time news between mid-January, when its $6 million purchase was announced, and July 1. WBEZ staffers began the work in early April, three months before the relaunch, according to Wendy Turner, v.p. of systems.

Essential needed help with “the fundamentals of setting up the news service, and they needed help in meeting a deadline,” Malatia said. “The notion was to set up something that could move forward on its own.” The Chicago team pitched in with budgeting, program scheduling, creating a sustaining membership program, and building Essential’s web platform. “We don’t think anything we did compromised their localism and they’re not dependent on us,” he said.

“If you have reverence for local service first and that is what you want to preserve, you can find partners who can help you,” Malatia said.

Doing without subsidy — and politics

In their keynote address, the Jacobs brothers pushed for broader reform. “We believe the entire system needs to consider an entirely new approach to the ways you’re funded,” said Fred Jacobs, president of Jacobs Media, a research firm that has produced studies for CPB, NPR and Public Radio Program Directors, among others. “Government funding will diminish or completely disappear.” And that might not be such a bad thing, he said.

“Think what would happen if public radio could operate truly independently of politics.”

The Jacobs’ proposal for restructuring called for a commission modeled on the Pentagon’s Defense Base Closure and Realignment Commission. It would have access to stations’ financial records and develop a five-year plan for withdrawing government funding from the system. They also called for governance reforms that would give more seats on the NPR Board to lay leaders drawn from the fields of media and journalism. “Public radio requires bigger outside thinking if it is to navigate successfully in today’s changing world,” said Paul Jacobs.

The Jacobs brothers advocated station-to-station collaborations within markets as a strategy for serving more listeners. Pointing to three Detroit-area stations that compete with overlapping broadcasts of NPR’s Morning Edition, they called for station managers to work out program- and revenue-sharing deals that add services, including broadcasts that appeal more to the Motor City’s African-American listeners. “We think this is an example of a missed opportunity to broaden the service footprint of public radio while creating true value for hundreds of thousands of Michiganders — truly growing the audience by providing more diverse program offerings within the same metropolitan region,” Paul Jacobs said.

The problem of duplicative programming within markets isn’t confined to Detroit, Fred Jacobs said. “We need to open the door to a scenario where stations share program costs and underwriting revenues. When stations air duplicative programs, all you’re doing is sharing audience, not expanding it.”

The Jacobs brothers also challenged public radio to open itself up for a new sense of vision and experimentation in programming. “Where are the next big shows? And who is tasked with creating them?” Paul Jacobs asked.

Public radio’s appeal to white baby boomers hasn’t weakened, they said, but the field must adapt to the media habits and tastes of adults under age 40. “They have their own media and don’t need to watch, read or listen to what their parents did,” Fred Jacobs said. “They access content differently and don’t need the radio or your program schedule to access what they want, when they want, whenever they want. And they were raised in a much more diverse culture and are more attuned to different sounds, tastes, and programs.”

McTaggart said MPR and its sister American Public Media intend to emphasize listeners’ needs and expectations — evaluating benefits to the audience before approving any new initiative or expense.

McTaggart pointed to a screen towering over the conference room, which displayed a list of five questions that will shape MPR’s first strategic planning cycle under his leadership as c.e.o.

Is our community directly informing the services we provide?

Is the whole community involved with our station?

Are we providing something uniquely and distinctly valuable to our community?

What other organizations have a vested interest in the success of our station?

What do we do that has the whole community talking?

MPR hasn’t yet answered these questions, McTaggart said. “We’re not running yet, we’re just beginning to walk in this way. . . . I want to make sure that the audience always stays on top, and that historic certainties are re-examined intentionally.”

EARLIER STORIES

Duquesne University’s decision to sell WDUQ 90.5 FM, the most-listened-to NPR station in Pittsburgh, was a red-alert threat for public radio signal loss. In other markets, universities are selling their student-operated FMs to pubcasters with signal expansion strategies.

RELATED LINKS

How does MPR become more “essential” to music lovers? Minnesota Varsity, an MPR Classical showcase for talented young musicians, put the spotlight on five finalists. Colleges and universities stepped forward to offer each of them a scholarship and an MPR major donor provided $1,000 cash prizes. The talent contest, launched this year, “takes us one step closer to being essential to those kids,” McTaggart said. “To being essential to their parents, the communities they’re in, and the friends we have.”

Social media also can be used to spur innovation in news programming. The Jacobs brothers pointed to #backchannel, a Twitter community created by Detroit TV anchor Stephen Clark, as a breakthrough in audience engagement.

Slide presentations from Public Media Development and Marketing Conference, July 14-15 in Pittsburgh, are posted on DEI’s website. [Attendee or DEI-member password required]

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